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Word Prob.
APR
Amort.
ARM
Balance
Buydowns
FMRR
FVA
FVLS
I/YR or N
Mortgage
NPV & IRR
PVA
PVLS
SFP
Wraps

Calculating Specific Types of
Time-Value-of-Money Problems

Word Problems

Recognizing the different types of Time Value of Money Word Problems
Once you get the basic operation and keystrokes for calculating a time value of money problem, there is only one other skill you need to learn. That skill is learning how to recognize what kind of time value of money problem you have.  Word problems are actually easy once you know this 1-2-3 secret!

Calculation Techniques

The basic keystrokes for each type of time value of money are reviewed below:

Calculating the Present Value of a future lump sum (PVLS)
Calculating the Future Value of a current lump sum (FVLS)
Solving for the Interest Rate or Number of Years (I/YR or N)
Calculating the Present Value of a series of fixed payments (PVA)
Calculating the Future Value of a series of fixed payments (FVA)
Calculating a Mortgage payment (Mortgage)
Calculating an Amortization schedule (Amort.)
Calculating a Sinking Fund Payment (SFP)
Calculating the APR (Annual Percentage Rate) of a mortgage (APR)
Calculating ARM (Adjustable Rate Mortgage) payments (ARM)
Calculating the Balance on a Mortgage (Balance)
Calculating the amount of a Mortgage Buydown (Buydowns)
Calculating yield on a Wrap-Around Mortgage (Wraps)
Calculating the Net Present Value and Internal Rate of Return (NPV & IRR)
Calculating the Financial Manager's Rate of Return (FMRR)

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Copyright 2005  Dr. Jerry D. Belloit